No cost analysis, no consultation, no idea on oil and gas ban

Minister of Energy Megan Woods has said she isn’t aware of any cost-benefit analysis before the decision to ban future oil and gas exploration permits, no formal consultation was undertaken with the Petroloeum Exploration Association, and the impact on the price of gas was not considered.

And alarmingly, no estimates were made on whether global greenhouse gas emissions will fall as a result of the decision.

The decision to ban future oil and gas exploration was made without a cost benefit analysis to back it up, Newshub can reveal.

It’s one of a number of admissions revealed in parliamentary written questions pointing to a lack of evidence behind the decision.

“I am not aware of a cost-benefit analysis using the Treasury’s CBAx tool being undertaken in relation to the decision to grant no further offshore oil and gas exploration permits,” Megan Woods said.

Dr Woods’ office told Newshub officials did not think it was appropriate to use the Treasury tool in this case as there were too many unknowns about how much gas and oil was actually out there.

“Searching for petroleum offshore is a low probability of success event but high impact if found, so trying to model the costs and benefits in a traditional option analysis spreadsheet would have required substantial assumptions to be made,” a spokesperson for the minister said.

So they just decided to do it regardless of possible costs and effects.

The Energy Minister has also admitted no formal consultation with the Petroleum Exploration and Production Association of New Zealand (PEPANZ) took place.

“No formal consultation was undertaken with PEPANZ in relation to the decision to grant no further offshore oil and gas exploration permits. However, I have spoken publicly about the Government’s direction to transition away from fossil fuels and my office has had open dialogue with PEPANZ before this announcement.”

Woods has just been to meet producers in New Plymouth this week.

“No specific estimate has been provided to me on the price impact on gas of the decision to grant no further offshore oil and gas exploration permits. Officials have advised that gas prices have risen in the past when the supply of gas has been constrained,” Dr Woods said.

No concerns about adverse effects of the decision.

There’s also been no estimates on whether global greenhouse gas emissions will fall as a result of the decision.

“No specific estimate has been provided to me. I have been advised by officials that the effect on global emissions depends on the response of New Zealand’s large gas users.”

And it seems that there was little or no interest in whether the ban would be effective or not.

It looks like this is a rushed ideological decision rather than evidence based.

David

WTF, so this was really a result of Ardern needing to deflect from the groping at the youth event by accepting a petition and then actually having to do something and thinking with 30 year permits it would look good but make no difference. Stunning.
NZ will now be poorer because some idiot shoved his hand down the front of someones jeans. The butterfly effect.

Gezza

Kitty Catkin

David

Ironically the oil price is breaking out after and has doubled in the last year, with the NZD dropping its going to be an interesting shock to hard pressed families when couple with the excise tax rise for tourist trams to the airport.
This is going to produce some bloody ugly headlines for Ardern.

Alan Wilkinson

Gezza

There’ll be plenty of that when the Remuneration Authority recommends the next round of pay increases for MPs and other beneficiaries of the public’s largesse. No worries there I reckon, Al. I imagine there’ll be a lot of debate about whether they should accept more money. 😐

Blazer

Kitty Catkin

MPs have no option about negotiating or accepting pay rises, contrary to popular belief, It’s completely out of their hands.I know that a number quietly donate their salary, either all or a generous amount to charity. National ones, anyway, and former Act ones. No, Blazer, I won’t name names, I don’t break confidentiality.

High Flying Duck

The ban takes effect immediately.
While the Government are saying there are 30 years worth of permits in play still, investment in them will drop immediately – if exploration shows resources outside of the permitted areas there is now no-where to go. With the finite term placed on the industry, who would invest?